The acquisitions include the Carrie Creek properties, which sits next to Tibbs in the Goodpaster mining district, and the nearby Mt Harper polymetallic project to add 65,600 acres to Tectonic’s exploration portfolio.
The land is owned by Doyon Limited, a Native Regional Corporation in the state and one of Alaska’s largest private landholders. Doyon and Tectonic have formed a mutually beneficial mineral lease property agreement covering all aspects of exploration through to production, including royalties, according to the junior company.
READ: Tectonic Metals starts drilling at Tibbs gold project and prepares upcoming drill program at Seventymile
The properties were last worked on in the late 1990s and have been sitting dormant for over 20 years, according to Tectonic. The firm said it plans to apply new geological models and analysis and use modern day exploration techniques in a bid to unlock the potential of the underexplored properties.
In a statement, Tectonic CEO Tony Reda said the acquisition represents “another forward shift in the game” for Tectonic as the company beefs up exploration the district.
“The Carrie Creek and Mt Harper properties not only represent a broadening of the exploration territory available to us and the creation of a district scale opportunity for Tectonic, but also a further strengthening of our already close partnership with one of Alaska's leading Native Regional Corporations, Doyon,” Reda told shareholders.
“Tectonic is proud of its strong working relationship with Doyon and our collaborative approach to structuring innovative lease agreements, which cover all aspects of exploration and production while supporting the local community by contributing to the Doyon Foundation, a non-profit charitable organization benefitting Doyon shareholders.”
Reda added that Tectonic is committed to its goal of finding the next Alaskan gold mine and providing economic and social benefits to the communities in which it operates.
Mutually beneficial agreement
The mineral lease agreement with Doyon grants Tectonic a 100% interest in both the Carrie Creek and Mount Harper properties for an initial 15-year lease term, with the possibility for extension over the life of the mine. In exchange, Tectonic will pay Doyon US$10,000 up front and staggered payments of US$10,000 until 2024; US$40,000 from 2025 to 2029 and US$100,000 from 2030 onwards. Tectonic will pay Doyon US$150,000 once it completes a feasibility study on Carrie Creek or Mt Harper. If Tectonic exercises an option to extend the lease term by another five years after completion of a feasibility study, the annual payment will increase to US$200,000.
In return, Tectonic has committed to spend US$1 million on exploration each year from 2020 to 2022; increasing to US$1.2 million between 2023 and 2026 and US$2 million from 2027 to 2030. Any unused exploration expenses can be carried forward into the following year.
Doyon will retain a net smelter royalty on production of base and precious metals, starting with 2% on precious metals and 1% on base metals until the end of the fourth year of production and increasing in subsequent years.
Doyon owns about 16.1% of Tectonic shares. The two organizations have similar agreements on Tectonic’s Seventymile and Northway projects.
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